Topline
WW International Inc.—commonly known as WeightWatchers—has agreed to buy a subscription-based telehealth service for more than $100 million, in an apparent attempt to cash in on growing consumer demand for using the diabetes medication Ozempic as a weight loss drug, as Ozempic’s soaring popularity prompts a contentious ethical debate among medical professionals.
This photograph taken on February 23, 2023, in Paris, shows the anti-diabetic medication Ozempic … [+]
Key Facts
WW is hoping to close on the deal to buy weight loss-focused telehealth company Sequence, which boasts around 24,000 subscribers paying $99 a month, by the end of June.
Sequence is known for connecting customers with doctors who can prescribe drugs such as Wegovy and Ozempic for weight loss, which has been dubbed the “worst kept secret in Hollywood” for shedding pounds and has become a hot social media trend.
WW agreed to pay $65 million in cash and $35 million in newly issued stock to Sequence’s owners, along with two more rounds of $16 million in cash paid out on the first and second anniversaries of the deal.
The company’s stock jumped more than 13.4% in after-hours trading to $4.39.
Crucial Quote
“There’s real excitement for the health outcomes of these medications,” WW CEO Sima Sistani told the Wall Street Journal.
Key Background
Doctors have increasingly prescribed injectable diabetes drugs like Ozempic for off-label—or unapproved—weight loss uses. The result has been shortages of the drug for diabetics who rely on it to lower their blood sugar, while doctors are also concerned it could be abused by those with eating disorders or others hoping for short-term weight loss. Ozempic and similar name brands are generically called semaglutide, which works to boost insulin and prolongs the emptying of the stomach, effectively letting users feel full longer. Ozempic has not been approved for weight loss, though the higher-dose Wegovy has for certain overweight people. Guidelines call for restricting Wegovy to either obese people or those overweight with a body mass index of at least 27 and one or more weight-related issues, like high blood pressure or Type 2 diabetes. A study published in The New England Journal of Medicine in 2021 found Ozempic users who reduced their calorie intake and exercised regularly lost an average of 14.9% of their body weight over 68 weeks, much more than the 2.4% weight loss a placebo group recorded.
Surprising Fact
WeightWatchers rebranded as WW in 2018 as part of a stated shift in focus to “wellness” instead of just weight loss. It has also significantly scaled back its use of weight-centered terms like “diet.”
Further Reading
WeightWatchers Moves Into the Ozempic Market With Telehealth Deal (Wall Street Journal)
Source: https://www.forbes.com/sites/nicholasreimann/2023/03/06/weightwatchers-buying-telehealth-service-known-for-ozempic-weight-loss-prescriptions-report-says/